You have now found the perfect job and received a job offer from your future employer. Congratulations! Your job search is finally over. Now, it’s time to sign on the dotted line and get to work. But before you do that, do you know what you are signing? There are several important clauses in employment contracts you should be aware of.
Some of these are standard and others can be non-standard, depending on the type of job you are going to be doing. In this article, we set out some of the clauses you should be aware of as well as what they mean. This can help ensure that you’re fully aware of your rights and obligations as you enter your new place of employment. Let’s take a closer look.
Standard employment contract clauses
Most employment contracts will feature several standard clauses which set out your scope of work and other details. It’s important not to gloss over these because any misunderstandings now can lead to potential conflict in the future. As such, important standard employment contract clauses you should look out for and ensure are written in your contract include:
- The duration of the job: is it a short-term contract or one where there is no end duration? Also, the hours of work should be set in stone in your employment contract.
- Pay: how much will your employer pay you for your services? When will you get paid? What deductions will the employer make from your salary? Will you be paid a base salary together with a commission? What about bonuses? Having clarity on these points is essential in an employment contract.
- Benefits: these can include aspects such as health insurance, disability and sick time, vacation time, and other perks.
- Probationary period clauses: these clauses provide set periods during which an employer can assess if the employee is suitable for the role. It may range from three to six months and the clause must comply with the minimum notice period under employment legislation.
- Grounds for termination: these will be the reasons for which the contract may be terminated. It can be both employer and employee-side related. For example, an employer may terminate the employment contract due to non-performance by the employee, while the employee may terminate the contract when they no longer wish to work for the employer.
- A confidentiality agreement: many employers have access to sensitive information such as client lists, trade secrets, and restricted business information. As such, it will be necessary to include in the employment contract a confidentiality clause that prohibits you from discussing or disclosing any of this information to third parties.
- Ownership: in many cases, an employee working for an employer passes their intellectual property to the employer who retains this intellectual property and considers it as intellectual property that belongs to the business. An example of this may be in product development or something like ghostwriting.
Restrictive covenants or clauses
It’s possible that, depending on the nature of your job, your employer may add other, restrictive clauses to your employment contract. These clauses restrict you from doing certain activities for a set period of time. Examples of such restrictive clauses include:
- Non-compete clauses: these clauses prevent you from directly competing against your former employer. As such, you may be prevented from joining a competitor or from setting up a business that competes with your former employer right after you leave the organization. This is a temporary restriction on your freedom to work for a competing employer in a certain geographical area after your contract has ended.
- Non-solicitation clauses: the purpose of these clauses is to prevent former employees from contacting and soliciting for business the clients or customers of their former employer with a view to drawing them away from that employer.
- Non-dealing clauses: this clause prevents you from doing business with any of your former employer’s clients or customers.
- Non-poaching clauses: these clauses prevent you from “poaching” or employing members of your former employer’s team at your new workplace or business.
Other clauses to look out for
And finally, apart from restrictive and standard clauses in employment contracts, you may see some other clauses that are still important in governing your employment relationship. Here are just a few of these:
- Severability clause: this essentially means that if a certain provision in the contract is deemed to be illegal, the remaining provisions of the contract are still valid and apply.
- Integration clause: this clause declares the contract to be the complete and final agreement between the parties.
- Arbitration clause: in the event of a dispute between the employee and the employer, this clause sets out that both parties should resolve this through an arbitration process first, before proceeding with legal action.
- Forum selection clause: this clause indicates that if there is a dispute relating to the contract, the parties agree that this conflict will be resolved in a specific forum. This is similar in nature to the arbitration clause.
- Indemnification clause: in the event of a problem, this clause releases the relevant party from liability. Examples of such issues could include inadvertently causing unexpected losses or expenses. Therefore, the relevant party affected by this clause will not need to take responsibility for the problem.
Getting hired for your next job is a great feeling! But it’s important to carefully consider the different clauses of your employment contract so that you are not left out in the cold after some time has passed.
While both parties – the employee and the employer – have rights and obligations towards each other, it’s essential that the terms of your joint agreement are mutually beneficial and favorable. This is why these clauses – both standard, restrictive, and other – are included there to protect both parties from harm in the future.
If you need any help in finding employment or if you are an organization looking for the right employees, StorsenDigital can help! We have a massive talent pool that you can tap into to ensure your business isn’t put on hold due to recruitment challenges. Simply get in touch with us today!